Four large banks agree to help Bank Lippo<\/p>\n
JAKARTA (JP): Bank Danamon, Bank Bali, Bank Internasional
\nIndonesia and Bank Central Asia have reached an initial agreement
\nto help Bank Lippo with its alleged financial problems, reliable
\nbanking industry sources said yesterday.<\/p>\n
The sources, who spoke on condition of anonymity, told The
\nJakarta Post that the four major banks planned to inject fresh
\nfunds into Bank Lippo, which was reported last week to be in some
\nfinancial difficulties. The sources said the plan had been
\napproved by Bank Indonesia, the central bank.<\/p>\n
No representatives of Bank Lippo or of the four other banks
\nwere available yesterday for comment on fund-injection plan.<\/p>\n
The sources told The Post that the bailout agreement had been
\nreached on the condition that the funds would be used mainly to
\nthe strengthen Bank Lippo's cash flow.<\/p>\n
\"The four banks did not want the funds to be used to back up
\nLippo Land, currently said to be in difficulties due to the poor
\nmarketing of its housing and office building megaprojects,\" one
\nof the sources said.<\/p>\n
The amount of funds to be injected into Bank Lippo, one of the
\nlargest banks in Indonesia, is not known.<\/p>\n
Roy E. Tirtadji, a Bank Lippo commissioner, acknowledged to
\njournalists early this week that the bank suffered a clearing
\nloss on Thursday last week.<\/p>\n
However, Roy played down the significance of the incident,
\nsaying that clearing losses were normal and could happen at any
\nbank.<\/p>\n
\"A clearing loss is normal in banking activities,\" Roy said.<\/p>\n
Clearing losses occur when a bank fails to meet its financial
\nobligations on a given day.<\/p>\n
Bank Lippo is one of the healthiest private banks in the
\ncountry, with assets totaling Rp 7.6 trillion (US$3.4 billion) as
\nof June 30. On the same date, Bank Lippo's accounts with Bank
\nIndonesia and other banks totaled over Rp 117 billion, while the
\namount of funds placed in promissory notes reached Rp 696
\nbillion.<\/p>\n
The bank's pre-tax profit was Rp 65.28 billion in the first
\nsemester of this year, as compared with Rp 49.78 billion in the
\nsame period of last year.<\/p>\n
Roy said that the bank's non-performing loans were only 0.3
\npercent of its outstanding loans of Rp 4.4 trillion. He added
\nthat the bank's loan-to-deposit ratio remained at the sound level
\nof 80 percent.<\/p>\n
\"The remaining 20 percent of the productive assets are
\ninvested in liquid instruments, such as promissory notes and
\ncommercial paper,\" he said.<\/p>\n
Projects<\/p>\n
Analysts linked the bank's clearing loss to the poor marketing
\nof Lippo Land's huge housing and office building projects in
\nCikarang, Bekasi and Karawaci (Tangerang), all in West Java.<\/p>\n
But Roy denied this, saying that the Lippo Group has other
\nfinancing sources for the property projects.<\/p>\n
He said that most of the housing and office building units in
\nthe Karawaci and Cikarang townships had already been sold.<\/p>\n
Lippo Land is now constructing hundreds of luxury houses,
\nthree high-rise office buildings, two apartment towers and a
\n200,000-square meter shopping center in Karawaci, about 30
\nkilometers west of Jakarta.<\/p>\n
A modern hospital and schools have already been opened in the
\nKarawaci township.<\/p>\n
Lippo Land, a publicly-listed property company, is also
\ndeveloping similar projects in Cikarang, about 35 kilometers east
\nof Jakarta. (04\/hen)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/four-large-banks-agree-to-help-bank-lippo-1447893297",
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